The Reserve Bank of Australia (RBA) is due to meet today (7 April 2015) to discuss the cash rate. Will there be an RBA cash rate cut? Many market commentators and the money market are predicting so. If the RBA cut rates today it will be the second time that they have cut rates this year (2015). The rate cut predictions are being made due to the weak Australian economy, rising unemployment and low inflation (with the exception of segments of the Australian property market).
It is thought that a cut to the cash rate would help stimulate the Australian economy, lowering the Australian dollar against other currencies and boosting export industries.
Some are concerned that another RBA rate cut (which should flow on to cuts in home loan interest rates) will further stimulate the Australian property market. However, it has been acknowledged by some experts that the ‘Australian property price bubble‘ is only confined to the Sydney property market segment. Whilst some investors are using lower interest rates to increase their investment in the property market, others are using record-low interest rates to pay down their mortgages.